Editorial: EOB fails to instill confidence

Wednesday, May 19, 2004 | 9:01 a.m.

Long before the state of Nevada identified serious accounting problems with the Economic Opportunity Board, the federal Head Start Bureau had made the same discovery. Head Start is one of approximately 30 anti-poverty programs funded through the EOB, Southern Nevada's largest nonprofit agency. The bureau began sensing mismanagement at the EOB after a 2002 audit.

Although the bureau began demanding answers following the audit, the issue of accounting failures at EOB received little public attention until January of this year. At that time, the state sounded alarms when the EOB could not account for $2.1 million in state and federal money. The state had advanced the money to the EOB to help low-income parents pay for child care while they worked. There never has been any proper accounting of where the money went. The EOB simply explained, although it couldn't prove it, that the advance had been co-mingled with other funds that paid for other programs. The EOB has since agreed to repay the $2.1 million to the state by September.

The obvious slipshod accounting practices at the EOB should have been prevented by its board of directors and administrative staff. As their failures came to light, many board members and top staffers resigned, creating turmoil and uncertainty at the agency. This crisis in management contributed to the EOB missing two key deadlines that had been imposed by the Head Start Bureau. On March 18 the bureau ordered the EOB to begin supplying it with quarterly expenditure reports by April 30. The bureau also demanded that it receive from the EOB, by May 1, a complete report on how it was going to fix the accounting problems it had identified in its 2002 audit.

Neither deadline has been met. And obviously the board, what's left of it, continues to be negligent in its oversight. State Sen. Joe Neal, a board member and its spokesman, said Tuesday he thought the deadlines had been met. When told otherwise by a Sun reporter, he responded, "It's not important to me." This is hard to fathom, when the missed deadlines, combined with the board's overall financial mismanagement, could lead the Head Start Bureau to cancel its $12 million contract with EOB.

In our view, every group that contracts with the EOB should now ask whether it wants to continue doing business with an agency that doesn't believe its obligations are important.